Greens push Northam to save RGGI bid

Source: Benjamin Storrow, E&E News reporter • Posted: Wednesday, April 10, 2019

Democratic Virginia Gov. Ralph Northam remained mum yesterday about the possibility of vetoing a budget amendment aimed at preventing the state from joining a regional cap-and-trade program.

But environmentalists expressed confidence the governor would use a line-item veto to strike the measure, which would prevent state officials from using money on the Regional Greenhouse Gas Initiative (RGGI), from the budget.

“We feel Gov. Northam has been consistently supportive of climate action and has taken steps to move the state in that direction,” said Kate Addleson, director of the Sierra Club’s Virginia Chapter. “We anticipate him using his authority to stop the climate deniers who are putting politics before people.”

Virginia’s participation in the nine-state cap-and-trade program has divided Richmond in recent years. Northam campaigned on the idea, initially proposed by his predecessor, former Gov. Terry McAuliffe (D). State regulators have proceeded with a plan to link Virginia with RGGI (Climatewire, Nov. 9, 2017).

But Republicans, who control the General Assembly, have sought to block Northam’s path, twice passing bills that would have prevented Virginia from participating in the program. Northam vetoed both pieces of legislation (Greenwire, March 15).

Blocking the budget amendment would help Northam fulfill his pledge to redouble outreach to African-American communities in the wake of a controversy over a racist photo in his medical school yearbook, said Harrison Wallace, Virginia director of Chesapeake Climate Action Network.

Sea-level rise and natural gas pipeline development pose a unique threat to communities of color, he said, noting that Virginia’s RGGI regulations also call for the creation of an environmental justice task force.

“He said the big thing to lead us out of this crisis was he was going to look into equity and policies that will help communities of color, or underserved communities,” Wallace said. “I think environmental justice is a key part of that. The one thing we have moving right now is joining RGGI.”

The uncertainty over Northam’s next move adds a layer of intrigue to the state Air Pollution Control Board’s April 19 meeting. The board had been set for a final vote on a plan to join RGGI.

It is unclear if that vote will go forward.

A spokeswoman for the governor did not respond to multiple requests for comment. Officials at the Department of Environmental Quality referred questions to the governor’s office. An RGGI spokeswoman deferred comment to state officials.

Dominion’s concerns

The stakes of Northam’s decision are considerable.

Virginia would be the first Southern state to join RGGI, which now encompasses the power sector in nine Northeastern states. And the commonwealth would immediately become the program’s largest emitter. In 2016, Virginia power plants emitted almost 32 million tons of carbon, according to federal figures. New York, RGGI’s largest emitter that year, reported emissions of 29 million tons.

Dominion Energy Inc., the state’s largest utility and a power player in Richmond, has raised concerns over the prospects of joining the cap-and-trade program.

In a filing with regulators, the utility argued consumers would pay more for electricity. It cited an analysis by the State Corporation Commission (SCC) that the plan would raise Dominion customers’ rates by $3.3 billion between 2020 and 2030. The higher prices could prompt an increase in imported coal generation, increasing overall emissions, the power company wrote.

Dominion has largely remained tight-lipped about the proposal in public.

“We will comply with whatever regulations Virginia adopts,” spokesman Dan Genest said in response to questions from E&E News.

RGGI supporters say the power company’s analysis is flawed. The SCC cost analysis is contrary to the findings of a study conducted on behalf of the Department of Environmental Quality, which found a negligible impact on customer rates. The SCC also assumes coal plants will continue operating at a high rate in Virginia.

In fact, the opposite is true. Coal generation plunged in Virginia last year, according to a Natural Resources Defense Council analysis of federal figures. The busiest coal facility in the state ran only 40% of the year.

Dominion’s carbon analysis is also lacking, said William Shobe, a professor who tracks the power sector at the University of Virginia. The state’s plan was designed to prevent emissions leakage by tying carbon credits to electricity generation, giving power companies an incentive to produce electricity in the state. Yet Dominion’s modeling did not take the state’s approach into account, Shobe said.

“All of Dominion’s analysis is based on a flawed modeling assumption,” he said.

That sort of back-and-forth might be expected to play out before the Air Pollution Control Board next week. Whether that happens or not depends on what Northam does next.